Veoh was hit with a copyright infringement lawsuit in 2006 by the Io Group, an adult entertainment company, but it defended its actions, citing provisions within the Digital Millennium Copyright Act. That provision calls for a party to remove copyrighted material from its Web site, when notified by the copyright holder.

A judge for the U.S. District Court for the Northern District of California in San Jose, Calif., found that Veoh was not liable for hosting copyrighted videos that its users uploaded to its site because the company used an automated process to post videos and did not play an active role in getting the material onto its site. The court also found that Veoh removed the material when informed by the copyright holder, putting it in compliance with a "safe harbor" provision of the DMCA law, according to the report.

The ruling may bolster Google's efforts to defend its YouTube video-sharing site against Viacom's $1 billion copyright infringement lawsuit. In a post in The Wall Street Journal, Google issued this statement:

It is great to see the court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights...YouTube has gone above and beyond the law to protect content owners while empowering people to communicate and share their experiences online.

The Google-Viacom case is still pending.

A Viacom spokesman, however, said the ruling does nothing to change the company's stance on the legality of YouTube's operations.

Even if the Veoh decision were to be considered by other courts, that case does nothing to change the fact that YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners. Google and YouTube have engaged in massive copyright infringement--conduct that is not protected by any law, including the DMCA.